ADIT(E), NEW DELHI vs. M/S. AMATEUR ATHLETICS FEDERATION OF INDIA, NEW DELHI

per Memorandum of Association of Society which was quoted in Assessment Order. The test to be applied is whether the predominant object of the activity involved in carrying out the object of general public utility is to subserve the charitable purpose or to earn profit. Where the predominant object of the activity is to carry out the charitable purpose and not to earn profit, it would not lose its character of a charitable purpose merely because some profit arises from the activity. The exclusionary clause does not require that the activity must be carried on in such a manner that it does not result in any profit. The restrictive condition that the purpose should not involve the carrying on of any activity for profit would be satisfied if profit making is not the real object. Therefore the assessee is entitled for the deduction under Section 11 of the Act. Hence, the Revenue’s case does not sustain.

The order is pronounced in the open court on 2nd of February, 2016.